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Slovenian cartonboard company to be restructured with EBRD financing
A Slovenian cartonboard manufacturer will receive financing from the European Bank for Reconstruction and Development (EBRD) to assist it to become a sound, profit-making company. Through an agreement signed today, the EBRD will make a loan of DM 19.6 million (ECU 10.15 million equivalent) and an equity investment of DM 5 million (ECU 2.6 million equivalent) to Papirnica Kolicevo d.o.o., the only producer of cartonboard in Slovenia and one of the largest in central and eastern Europe. The company mainly produces multilayer coated cartonboard based largely on recycled paper. The product is used for both food and non-food packaging.
Olivier Descamps, Director of the Country Team for Slovenia at the EBRD, said: "This project fulfils one of the EBRD's major roles, which is to take troubled but technologically viable enterprises, inject longer-term funds, and help restructure the companies into financially viable, self-sustaining entities. The EBRD investment in Papirnica Kolicevo will help upgrade existing equipment to produce competitive quality products. Most importantly, it will bring the plant's waste-water and effluent treatment up to European Union standards."
Papirnica Kolicevo is a formerly state-owned Slovene company which was acquired in 1992 by Sarrio S.A., which is a leading European company operating in the cartonboard sector. Sarrio S.A. is the Spanish subsidiary of the Italian group, Saffa S.p.A. The other minority shareholder in Papirnica Kolicevo is SKLAD, the Slovene state-owned development fund. The EBRD will become a shareholder as soon as the capital investment in the company is made.
The project involves modernising the company and financially restructuring its liabilities. Along with the transfer of advanced technology and the upgrading of existing equipment, Sarrio S.A. will fully integrate the plant's production, marketing and sales with its own operations. The financial restructuring will aim to rebalance the debt/capital structure, restructure existing supplier debt, and reduce the financial burden of existing short-term liabilities.
Upon completion of the investment programme, Papirnica Kolicevo is expected to be one of the most efficient and environmentally sound mills in Europe, and in a position to export a large portion of its production.
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